Apple Extends Smartwatch Lead as Watch Series 5 Reviews Roll In

Apple's new Apple Watch Series 5 is out in the wild, and the early reviews have mostly been positive.

The latest smartwatch model, a mainstay of Apple's
(AAPL) - Get Report fast-growing wearables business, began shipping to customers about two weeks ago. Retailing at $399 and up, it comes with a few key upgrades, including an expanded range of cosmetic options, always-on display, improved navigation tools, international emergency calling and watchOS 6, Apple's latest operating system, which helps the watch to operate more independently from the iPhone, among other features. Perhaps ironically, one of the most notable capabilities in the Series 5 is that it functions more like a good old-fashioned timepiece.

"It finally works as a watch," said Rene Ritchie, a longtime Apple reviewer and lead analyst at iMore, an Apple news and review site. The new display eliminates the need to view the time through a hand gesture.

As for what the Series 5 will mean for Apple's wearables business, investors will likely learn more after the holiday sales season. For now, industry analysts anticipate that the Series 5 watch will extend Apple's leadership position in the smartwatch market.

Apple doesn't disclose sales figures for the Apple Watch, but CEO Tim Cook told investors on its July earnings call that wearables, which includes Air Pods and the Apple Watch, grew "well above 50%" in the second quarter. Revenue for its wearables, accessories and home segment came in at $5.1 billion for the quarter.

Looking ahead, Apple's smartwatch sales are expected to accelerate further -- boosted by both newer models and, notably, substantial price cuts on older models that could introduce more customers to the product. While the Apple Watch 5 starts at $399, Apple slashed the price of Series 3 models to $199 and up, and also cut the price of Series 1 models to $149 and up last year.

Research firm Trendforce, which measures device shipments, estimated that Apple will ship about 34 million Apple Watch units next year.

"Apple's success in the smartwatch market is based on an effective pricing strategy and a proactive approach to the development of new products," said Jason Tsai, analyst at Trendforce. "The price cut for the Series 1 models, in particular, has been a significant help in boosting shipments."

Early reactions for the Apple Watch 5 weren't uniformly glowing, however. Some Series 5 customers have complained that the battery life leaves something to be desired. Apple said that the new model has the same 18-hour battery life as prior versions -- no minor feat given the always-on display -- but some watch owners, of the cellular models in particular, have complained that the always-on display drains the battery more quickly than the Series 4, requiring constant recharging.

iMore's Ritchie noted that it's not uncommon for new devices to suffer battery issues -- a problem that has plagued countless gadgets in the past -- and that Apple could improve battery performance through subsequent software updates.

The battery issues may be attributed to "software bugs Apple needs to push an update out for," he said. "But that's often the case in the very first weeks."

Apple
(AAPL) - Get Report shares were up 2.38% on Monday to $224.01 and are up almost 42% this year.

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